Mamata Govt Blocks Tea-Garden Sale On China Fears
Fearing Chinese investments through fronts in HongKong and Singapore that could undermine the uniqueness of Darjeeling Tea and the security of the Siliguri Corridor , the West Bengal government has come down hard on deals involving sale of some tear gardens of two Indian companies.
The blocking action by the Mamata Banerjee government predates an Indian government decision to stop ‘automatic clearence’ to Chinese investments and subjecting them to intense pre-takeover scrutiny on a case-by-case basis .
Home Ministry sources say the Centre’s decision may have been influenced by West Bengal’s move to block the sale of Darjeeling region tea gardens to possible Chinese fronts.
The sale by the Indian companies was to take place to investors in HongKong and Singapore.
West Bengal Home Department sources told Easternlink that the Mamata government has two major fears.
If the buying companies were indeed “Chinese fronts”, which was likely to be the case, the Chinese would severely jeopardize the USP and GIS of Darjeeling Tea, by resorting to mass-producing similar type of teas in Nepal or Yunnan, which is home to the great Chinese Puer Tea.
Secondly, if the Chinese came to control these tea gardens and set up some similar ones in contiguous areas of Nepal, they could be converted into “some kind of a special operations base” secretly housing PLA commandos or sabotage groups who could impact severely on supply lines of Indian troops defending the strategically vulnerable Siliguri corridor.
” There is a huge business-economic angle and a huge security angle to these deals,” said former Intelligence Bureau officer Benu Ghosh, who have long worked in North Bengal.
Tea Industry sources say the Darjeeling district administration has moved decisively to halt ownership transfer of six gardens, located near the army’s Sukna-based 33 Corps, in the last few months since the escalation of tensions on the India-China border
The district administration’s action was obviously prompted by intelligence inputs about China trying to acquire gardens located close to the Siliguri corridor, a 22-kms stretch that connects Indian mainland to seven Northeastern states. The district administration first sought additional details from the companies about the overseas investors to whom they were planning to sell their gardens, Bengal Home Department sources said.
Tea is one of the few sectors where 100 percent foreign direct investment is allowed.
But the government stepped up scrutiny following reports of possible “opportunistic” takeovers or acquisitions of Indian companies by Chinese investors leveraging the downturn caused by the C-Virus pandemic.
The Darjeeling district administration however had acted even before the central government’s department for promotion of industry and internal trade in April made prior government clearance mandatory for investments, even indirect ones, from countries sharing land border with India in a bid to clamp down on investments from China.
Tea industry sources, unwilling to formally come on record to name the companies who had proposed sale to Singapore and HongKong based investors, did allude to three tea estates belonging to the Alchemist group and three to the Ambootia group.
The seventh garden could not be identified, because the government is hush-hush in action , perhaps because the Centre is unwilling to upset China too much.
Dhotre, Peshok, and College Valley are the three Alchemist Group’s gardens up for sale, sources said. Alchenmist group , owned by K D Singh has been in talks with a Hong Kong-based company to sell its three gardens lying abandoned since 2017. From May, 2018, the gardens were brought under the state government’s Financial Assistance for the Workers of Locked Out Industries (FAWLOI) scheme.
The group’s owner KD Singh is facing multiple probes by central and state agencies like Enforcement Directorate and the Securities and Exchange Board of India, for several irregularities including running a Ponzi or chit-fund scheme.
None from Alchemist could be contacted to formally react on the proposed sale as its offices stand either sealed by the investigating agencies or abandoned.
Ambootia group Sanjay Bansal , contacted for reaction on the proposed sale of of three of its gardens to a Singapore-based company with alleged link to Chinese investors, dodged Easternlink . “I don’t talk to strangers,” he said and did not reply to text messages.
Its administrative office in Kolkata, when contacted, promised a response by ” suitably authoriesed person” from the group, but none contacted Easternlink in the last three days.
Darjeeling district magistrate S Ponnambalam said he was now too busy to divulge the details of the action taken by the administration.
“Right now we (administration) are two busy combating the Covid-19 pandemic. I have to see those files, but for that I don’t have time now,” Ponnambalam said over the phone.
Some trade unions active in the gardens have also reportedly conveyed their concern about the development to the district administration.
“We had alerted the government about the development. Even the tea Board of India is keeping a tab on the development,” said Citu’s Darjeeling District general secretary Saman Pathak.
Ponnambalam, however, asserted that it would not be easy to scrape through any such deal as all tea garden land belongs to the state’s land , so the land reforms department’s consent is a must for a land lease agreement needed for transfer.
The possible Chinese tea garden takeover attempts follows growing Chinese presence in buying of Darjeeling tea. Two tea buyers from China have been recently touring north Bengal regularly to study the cultivation and production of tea in Darjeeling and the Dooars.
They have had extensive discussions with small tea growers and have often tested the brew produced in the region .
Bing Zia and Xiao Wu, the two buyers, said they were associated with companies involved in production of green tea.
“But these days, a considerable number of tea drinkers in China, particularly young Chinese, prefer CTC tea often drunk in creamy fashion with milk. Possibly they developed this taste for creamy drink after tasting creamy beverages like Starbucks coffee. That is why we are here to check out the cultivation of tea leaves and the production process so that we can import more CTC tea,” Bing, who is associated with the Zhejiang Tea Group, told Easternlink.
“We want to know how much pesticide and fertilizers are used at the tea plantations, both in tea estates and in small gardens,” Bing added.
Bijoygopal Chakraborty, the president of the Confederation of Indian Small Tea Growers’ Associations, had said a while back that the visit by the Chinese buyers could help in increasing export of Indian tea to the neighbouring country.
“We had invited officials of the tea board and the Tea Research Association so that our guests from China can get more information about tea. We had also conducted a tea-tasting session in association with the TRA. We told the Chinese buyers that the small tea sector contributes around 40 per cent of the total production of tea in India. The tea leaves we produce are processed into CTC tea at bought-leaf factories,” he had said.
According to Chakraborty, around 8.52 million kg of CTC tea was exported to China in 2019.
In the current fiscal, there is a target to export around 20 million kg of tea to the neighbouring country, but now that target is a ‘wasted dream’ due to C-Virus , China-India border escalation and now the blocking of the sale of tea gardens.
“We want tea produced in the factories run by the growers’ cooperatives to be exported to China. The tea bushes in our plantations are young and CTC tea of excellent quality can be produced from these leaves,” Chakraborty added.